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tv   Fast Money Halftime Report  CNBC  February 1, 2013 12:00pm-1:00pm EST

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. banks some of the biggest performers today. 3% on bac as it is at 1166. jp morgan, citi, goldman, too, a new high at 149.94 up almost 1.5%. want to take a look at facebook as well. one of the few losers today down almost 3%. likely on continuation from its earnings earlier in the week. stock also getting hit with multiple downgrades over the last few days. interesting that those high flyers in technology like facebook and apple are down on a day where the markets are up so significantly the dow up 139. the moment you've all been waiting for in honor of jobs friday. we've been asking our viewers to tweet us their week long, all week long their guess estimates of today's jobs number. a couple of you actually nailed the number but only one got the entry in first. adrian texiera trader, father of three boys from pembroke pines,
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florida tweeted in exactly 157,000 early thursday. couldn't join us this morning but did tell us earlier he plans to hang the blanket in his office. congratulations to you. that's it for us on this dow 14,000 day. as we hit noon let's get to fast money halftime over at post 9. >> thanks, carl, a special edition of halftime today live from the new york stock exchange where we've watched the dow jones industrial average top 14,000 for the first time since 2007. truth is a number of asset classes are making memberorable moves today. we're right here as carl said at post number 9. steve weis, what do you make of what we're doing today and what trade would you make as you sit here today? >> here's what i like. i like the fact that the revisions on the jobs numbers were huge and the market as
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we've seen consistently with the gdp number this week and the jobs number for january are ignoring any hint of bad news and i'm not so sure it's bad because explainable, you can explain it away and go on higher. so the trend i like is the one that i mentioned yesterday which kind of surprised me actually is being short the bond market, specifically i am long tbf. what is interesting, scott, is that bonds are actually doing okay today and there is some sort of disconnect there. i think that catches up on the bond side and that they go down equities continues to go higher. >> rather than tell me whether you're bullish or not just tell me what trade you would make. if someone is watching the market today. >> perfect. that is exactly what i want to do. i don't want to think anymore. i just want to react. what do you have to react to? obviously the financials. this gentleman next to me has been talking about them for the last 18 months. i'm adding to my position. apple is down today. yes, yesterday i owned puts, got out of those puts.
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reversing the position. apple down here at 450. market moving higher. i'm willing to allocate more money into apple. >> we'll get to that discussion in a moment because apple's trading miserably compared to the overall market today. and that is a significant story in its own right. pete? >> i think joe pointed out the financials and i would specifically look not just to the xlf because all the financials, if you look at that you see it's breaking out. jp morgan still remains under book value something close to $51 a share would be boochblgt i think going through the 52-week highs today means that this stock is going to actually hit $52 a share. why do i say that? i think there are buy backs, potential for the dividend to go a little bit higher. and when i'm looking at what we've seen in the option markets they've been playing in the financials. they continue to buy the upside of the xlf. jp morgan looks like one of these names not only breaking out. i think it finally gets to book value and then is off to the races. >> dr. j.? >> trade i made right away today was carbo ceramics crr.
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this is a fracking play, judge. and since max meyer said i could say whatever i want i'm going to say whatever i want and crr is a fracking play, folks. $2 billion company. they help with the hydraulic fracking. i think this is off to the races because energy is going to be a focus going forward. the fact that crude oil is holding in much higher than many thought and that it is going higher, that's why i think you own this name. >> all right. so what could be the next leg to take the market higher? >> i think the near term, we've got to pause. the psychological break point generally is in terms of breaking the momentum these big numbers. dow 14,000. s&p 1500. what will get it going is that you'll see first quarter gdp be stronger than people think and you'll see jobs continue to come back. so february should be a strong jobs number and i think you see corporate spending loosen up and some m & a activity go on.
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that will get -- >> joe what do you need to see to take the market even higher? >> let's be succint. i don't need to see anything. i saw everything i needed to see today. i told you that yesterday. the jobs report, the revisions were good. european pmis were good. the ism was good. it's a similar situation as to what we had last year. january and february of 2012. first day of february, strong jobs report. we tacked another 4%, february of 2012, on to the 4% gain that we got in january. don't buy into the fear. buy into the markets. stay with it. >> all right. we've been watching the bond market as well of course. the ten-year yield is still flirting with that 2% level and that debate really raging now of whether in fact there is a bond bubble and what that could mean for the equity markets going forward. let's bring in an old friend from pimco who joins us here at the stock exchange. tony, it's great to have you here especially on this momentous day where the dow is recaptured, 14,000. have you guys at pimco under estimated market's ability if you will to look past the noise?
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>> no. we've talked a lot about the reflation of assets. what we fwautalk about in terms slow growth, great implications for accommodative federal reserve policy and low interest rates. we see that environment sticking but the reflation effort by the fed the bank of england, bank of japan, all bad for the long end of the u.s. yield curve. pimco is avoiding longer data issues beyond ten years. we'd rather stick to the five to ten-year part of the yield curve. >> you paint a scenario in which somebody watching would say well that is exactly the scenario i see if i think the stock market is going to go noticeably higher and yet you guys aren't looking for double digit gains this year for the dow. >> this is also a relative gain. there are better opportunities we think where you're safer and there is the potential for volatility still because of macro risks of course. and to see stocks continue
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moving upward reminds us that the financial market performance is continuing to diverge from economic performance. the employment report while good is still not great. we want to monitor to the extent to which markets move away from the way economies perform because that will set up dangers in the future. >> you have to admit, the economy save for the shockingly disappointing gdp report seems to be performing better whether it's construction site, housing side, manufacturing side. some of the other metrics. even the employment side with the strong revisions that we got. you'd be willing to admit that. >> what is really important is that this go beyond just financial assets. households lost about $16 trillion in the downturn. about 13 trillion has been recovered. almost entirely in financial assets. that's where the wealth effects are smaller than the housing market with 3 to 5 cents on the dollar versus 8 to 9. maybe in 2013, pimco's call is for recovery. in fact the first time in seven years pimco is expecting an upswing in the housing market.
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if it in fact continues then the wealth created in housing could become more important to the economy and sustained movement in financial markets but without that it will be more difficult to believe that markets can move alone based on the federal reserve. >> there is a significant debate in the market right now as to whether there is a bond bubble. you say no. one of my traders steven weis says yes. weis, why do you believe there is a bond bubble and let's have a healthy debate on where we stand right now. >> i'll give you a few reasons. we had a guest on yesterday. and i asked the question, when have you ever seen rates stay this low this long a period of time? and she couldn't come up with an answer. the reason is there is no answer to it. so here's how i look at it. markets are not like wars. you don't wake up one day and all of a sudden the white flag is being raised and they surrender. there are a series of ongoing battles, ongoing skirmishes and you're not going to see the economy turn down, turn around in a day and wake up and see it
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in the journal. so the economy, the market is a discounting mechanism and we're discounting news slowly and what we're going to see and what people are going to get worried about is the great unwind where the fed has no experience in terms of unwinding it. so just like the housing bubble that the people involved in housing and our own fed said this goings to keep going on and on, there is no bubble, the bond market is a bubble. the risk is horrendous. the risk reward to bonds particularly long as pimco says but also on the shorter end because once money comes out it's going to come out in a big way. furthermore, when people start seeing that minor movements in terms of interest rates are creating havoc. >> right. >> with the capital loss, they'll run like crazy. >> it's an interesting dissertation you give to us weis but the bottom line is that money is coming into the stock market. >> how many lies do you go through -- >> the real question -- all
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right. the real question becomes whether money is coming in from cash on the sidelines or whether it's coming as a rotation out of the bond market into equities. ultimately that will be the decider as to where the stock market goes from here. >> so, first, two and a half years ago on the cnbc website i posted, bond bubble babble, i might add a question mark now. but most of the things in there still persist today. i call this perhaps the great dehibernation rather than the great rotation meaning money can move out of cash and money market instruments to the stock market, to the bond market. but to expect that a 60-year-old for example who lost money in their home might move from, my grates to riskier assets at a time after they've had two shocks in a decade seems a little odd to us and highly improbable they'd want to do that. they want to stay high in the capital structure and remember as well cash flow is the name of the game and in corporate bonds many corporations have the ability to repay you still. that is no bubble. you will get your money back unlike say pets.com in the year 2000. >> right.
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>> that was a true bubble. finally the federal reserve is still active. the unemployment rate at 7.9% is a great distance from the 6.5% it said it would begin to have to consider a rise in interest rates. that force alone is very powerful in keeping interest rates low. >> but tony, that is exactly the reason, the risk that we've seen to equities that is going to happen into the bond market. people will lose money and run. >> you could say that that risk -- >> i'm going to wrap it up. >> the fed is pushing investors to take more and more risk and without more improvement in the economy being more difficult is the same as those gains. >> appreciate you coming from the west coast to send time with us here. >> thank you. >> not all stocks are celebrating the dow run to 14,000 most notably apple, down 1% today and one of the biggest losers in 2013. down 15% on the year. so, joey t., miserable trade in apple. what does it mean? what does it mean that apple continues to go down and the stock market continues to go up? >> well, i think it's actually
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probably a good thing for those apple investors that actually have the stock because on the other side of your losses in apple you are making gains in the overall market itself. let's talk for a second about the fundamentals and the actual price action going on in apple. i said yesterday i felt as though the inability for apple to take out last thursday's 465 post earnings high was problematic. we made a run at 450 this morning and i think a lot of that is predicated on the weekly options and the expiration surrounding that. got below 450. looks like it's found a little bit of a near-term bottom with the overall sentiment in the market being good, technology being good, i'm adding to apple right now. doing it a little bit through the options market. and i think longer term that's the right trade to make. >> can the stock market continue to go up with no participation from apple? >> yes. absolutely is the answer. and it has. and you were just talking with tony about rotation and so forth. whether money is coming off the sidelines, whether it is coming out of bonds.
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i believe that we have seen pretty significant evidence that it is coming out of bonds. i can't tell you that it came directly out of bonds and into the stock market. i could also tell you it came oust the people that chased gold. the people that chased gold to 1800 to see it come despite the fact that there is still this printing press running in virtually every country around the world for cash, we've got people that are nonetheless surprised. shocked that gold isn't reacting. so what are those investors doing? not people like kyle bass that are long-term believers but all the rest of the fast money, that's where it's been coming out of, scott. coming out of gold and into the stock market. >> if you look overall and the market continues to go higher, and i know pete is looking at me because pete is a little suspicious of what i've said here with apple. i've been wrong the last couple months on it. but as the market continues to move higher and you are an institutional money manager managing a billion dollars plus and you look at some of the names that have rallied ten plus
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percent so significantly the market keeps moving higher you've got to find a home for capital at a new place. you look at the under performers and again this is a company with 137 billion dollars worth of cash. they need to do something with it but clearly it is an under performer. as long as the market is going higher that is going to be a port of call for some of that capital. >> the problem for apple right now i think is it is still going to be a second half story and that's why i continue to stay away. every week somebody comes up to me, people ask me when is the time to get into apple? the time isn't yet. this has been a broken stock for a while now and until we get toward the second half when they start to get some of those products actually working out in china, when they start to get to the phone market out there, that's when we start to see apple i think start to move back up to the up side. i like the new product refreshes and everything else. but right now where money also, the capital is going. it's not just in the big cap financials. the xlf is performing extremely well. look at some of the garron tors, insurance stocks. look at aig, ago. those names are performing. when you look at value they'll continue to perform.
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>> we'll get a trade update from tom demark who called for the bottom in apple just a little too early and we'll get his thoughts on the rally at large after the break. also coming up on halftime breaking down all of the big movers in the four-year stock rally. and netflix is this year's hot stock up more than 80%. but can the company that wants to change the way we watch tv keep soaring? two traders, one heated debate straight ahead. with fidelity's new options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity.
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the biggest winners, best performers since the market bottom. tops on the list? wyndham worldwide. let's take a stab at some of these, guys. i mean, anybody want wyndham? that's been a remarkable move. fifth third bancorp speaks largely on what banks have been able to do, regional bank. >> i like the regional banks. fifth third i like that. the other day regional banks got a bit of a downgrade. regions financials. someone is going to look at it at some point and be able to die vest. >> i'll give weis a health care one. you follow it closely. >> it's been a changing story in terms of their reorganization but they're in the hospital space and the hospital space will continue to benefit because
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the government is picking up the tab. with no bad debt expense with more people using hospitals because of obama care it's going to keep going. >> media stocks have done quite well. cbs? >> cbs is great. i like, i mean, the wyndham, the number one on that list earnings wednesday next week, judge. i like this one because barry sternwick was on cnbc i think monday this week. he of course with starwood and so forth talking about how properties around the world have appreciated and perhaps how they're not valuing properly the land underneath many of those properties. wyndham is a beneficiary of that. and obviously any of the reitization of any of these companies could also put a lot more on the bottom line. >> and the whole travel and leisure complex has done very, very well. >> yes. >> through the year. airlines, priceline, so that's wyndham as well. >> something we haven't talked about yeah we've talked about this move back to 14,000 on the overall market but not what was leading today. that was telecos. that is the leadership group
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today. what is your outlook? kind of amazing. what's happening, what is driving the telecos today is the facebook conference call where they talked about how mobile usage is up so much. quarter to quarter, year over year. that's daily use. that's big. you've got some new phones coming out where there's bb 10 in march or a new galaxy or speculation new apple phone. that will also drive daily usage and that is why teleco is doing well. >> tom demark the founder and ceo of market studies. he was calling for the apple bottom on fast money in mid january. good to have you. thanks for coming on halftime. >> great to be back. >> a little early obviously in the call on the bottom for apple. where do we stand right now? what does a guy like you make of the miserable trade that apple has been at a time when the dow recap churs 14,000? >> let me give you some perspective. september 21st when we turned bearish on apple the day of the high we produced what we call a 13 when the stock was trading above 700 and got to 705.
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we said the market, the apple was a sell at that time. and there weren't a lot of disbelievers. then on january 15th when we appeared on the air we said that we expected one more down close. a lower close than on the 15th. the bottom of the stock. we did anticipate this is an after hours conversation that we had. we thought that the market could open the following day, 11 points higher than where it was trading after market which is 494 to 495 and in fact did open there. and it did deem some traction to the up side but did not record that additional down close. >> what do you make of the fact, let me ask you, what do you make of the fact it can't seem to gain any traction? >> i think now it will be. it's going to be surprising. we did produce the 13 on january 24th. one day before the low. and if you look at apple's entire decline the most number of consecutive down days has been three. on december 14th we had three down, consecutive down days and the market reversed to the upside. on december 21st same thing.
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three consecutive down closes and the market moved sideways. then on january 15th the day that i did save we needed one more lower close. >> i get the feeling we're making a round about way of saying you still think the bottom is in where we stand right now. >> if you look at the last three days we had three consecutive down closes but in a very narrow trading range. that typically is indicative of a market turn. the fact that we had a gap down side such a significant gap down side i would not be surprised. i mean this is -- just like on september 21st high when we said the market had topped in apple and january 15th when we said an additional down close would probably bottom it we had one more additional lower close. that was all it was. january 25th. it would not be outrageous to expect possibly a gap up on monday and what technicians refer to which we are not technicians but referred to as an island reversal could occur. it seems outrageous right now but the stock could open up on monday and typically when
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markets -- the direction of a market is determined typically on mondays so we could turn to the upside on monday and produce an island reversal. there are a lot of things happening right now. the bond market produced a buy signal two days ago. the shanghai index which we turned positive on december 4th on the air they are with you people when it was below 1950 we projected upside a move of 48%. we've already moved up 24%. that's half the move. we're about to get a sell signal on shanghai. >> right. >> a lot of people talk about the market cannot go up when apple goes down and vice versa. we've seen that happen. i think the stock market which we thought would top at 1492.73 has exceeded our level. we turned positive on the 16th but we think it could still turn down on monday. >> got to leave it there. thanks for calling in. >> thanks. >> tom demark. what do traders here at the nyse think of today's market move?
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let's bring in our friend steve grasso. welcome. you know, a big day for the market recapturing this important level of 14,000. where do we go from here? what are the traders looking for to take it the next leg? >> you know, you spoke about the levels in the dow and the level in the s&p. this is going back to december of '07 levels. so that 1510 mark, once we took that out and we're right around it right now, it's 15 and a quarter, right back to the old highs. 1576. everyone is cautiously optimistic. they are positive on a lot of their own individual stories but we're also waiting for the other shoe to drop. that is just the state of what it's like on the floor. >> it's been such an interesting move that the market is largely able to look past, cover its ears, from any of the noise out there. that helped us get where we are now. can we continue to look past some of the issues to take it further? >> there have been so many issues. first europe, then the united states. all of that seems to be a
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secondary issue for investors. they're hunting for yield. they're hunting forfor capital appreciation. market place the only spot to get it. so ben bernanke has pushed us all into the equity market. how long does it last? i don't know but the high flyers that i'm in, amazon, apple, google, yes, i bought all three. i'm in all three of them now. >> yeah. what's the most recent pick up you made was google right? >> i actually bought google this morning. i own google. i added to it the day before. the day of earnings. had that huge pop. sold it. somebody just yelled shut up on the side of me. they think i'm bragging. i sold it at 750. now momentum back on the bulls side, bought it back today at around 761. added once again at around 770. the huge catalyst was the ftc settlement. next is the eu settlement. they sent their proposals to the eu so now that's going to be another tail wind for them versus the head winds they've seen waiting on those settlement issues. >> you can grab that guy grasso
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and we can arrange a little something. rumor has it that happens from time to time. >> i know where he is. one of my friends just threw him down the stairs. the camera couldn't turn in time. >> steven, sitting right to my right, weis, complaining you're cutting into his air time. >> exactly right. >> grasso, have a good weekend. catch you next week. >> enjoy yourselves. >> interesting buy that he made on goog right? a big cap tech. >> and a lot of guts because it is within 50 cents. it got within 50 cents today of the all time high. october 5th, 774.38. we got up within that much of it today. i hope that steven and the rest of the longs and goog get to enjoy the ride. >> it is so interesting there was a time where you thought that apple and google would make this tandem climb higher and then google is now left apple in the dust. >> its movement to market. the momentum stocks are the ones moving higher and there is another indicator. najarian brothers watch. the more gold and pete watch -- >> got some gold in this.
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>> unbelievable. >> let's take a look at the sectors leading the s&p gains today as the s&p does hold above 1510. coming up on halftime we got a street fight on netflix. it's the best performer already this year. where does it go from here? two different opinions will lock up. gold prices are stuck. why is one commodities investor bullish on the precious metal? eric spratt is up next. definitely want to hear what he has to say. is the gold era over? >> fast money isn't just about a bull market. could be going up, down, or sideways. >> in the blink of an eye everything changes. you've got to be able to surround the trade. >> doing what we do for a living and we're all together as a team but we all come at it from a different perspective. >> all about moving the odds into your favor. >> really what drives out the value of the show. >> i am john najarian. i am fast money. >> i am stephanie link. i am fast money. >> i am steve grasso. i am fast money.
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welcome back. we've already hit the biggest winners. now let's look at the biggest losers since the market bottomed
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in 2009 including in that list hp and best buy. weis, go to you first. you have your pick here. >> well, hp to me is always going to be a value trap as far as we can see because they're in dead business. the printing business is dead and the pc business is dead. even if they break it up then you have two bad companies so i'd stay away. in terms of best buy it's a climbing business model. >> hp has certainly had an interesting move right in january? the interesting thing was last year hp was the worst performer in the s&p. bank of america was the best. then that is reversed. or the dow or whatever and then that is reversed for the month of january. >> a loft the performance recently in hp has to do with what's going on with dell. maybe some folks speculating a similar scenario for hpq. i don't know if i necessarily see that full disclosure in del. i did exit that position today at 14 bucks finally. i think with hpq fundamentally
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they are challenged and where the valuation is right now given those challenges the valuation is full. >> best buy is about as fundamentally challenged as anybody. >> right. >> you're talking about a space where people go in. they look at prices and, unfortunately, they're not going to buy at best buy. they've actually just been a great retail for other people including online sites. right now what you're trading off in best buy is possibly that they might get bought back in a leverage buyout. other than that i can't see reasons why you want to be in the name right now. >> on everybody's radar, netflix spiking 3% today. up 83% year to date. is it time to get in? that is the real question. pete is our bull. weis is our bear. we've got 90 seconds on the clock. pete? >> netflix obviously a hundred dollars, just a week or so ago, now up near $200 at $170 a share, very fearful. if you're going to be somebody who wants to be involved now, you can only do it through the options and only through call spreads looking for more upside. the reason i think there is more
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upside, they've got scale. they've got original content. they of course got that disney deal for more content. then you look at what they were able to do with some of their debt and refinance, $500 million now recently 3% lower than they were when they paid off. this is a company that is doing things right and it is all about content. that is why i think the stock actually hits 200 in a very housing authority tim short time. >> i think bernie madoff could refinance his bail at this point the credit market is so ripe but in terms of the stock -- >> not so sure. >> normally i don't care how far stocks have gone but i don't tend to live in the past either. and the fundamentals may be okay but they're spending all for content and then another basis -- >> they just told us that. >> absolutely. that's what turned it around. it is not huge, only 20%. they've got another base to look at the stock and rave on and that is the original content. initial reviews of the house of cards are not great. but more so than that, the
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valuation is extreme under any measure except on a price to sell. >> you could say that about amazon. you have international expansion possibilities. >> true. >> you have global content expansion possibilities. and then when luke at the original content that brings a whole new subscriber they said. >> that is the last word. gavel comes down. doc? who made the most compelling argument? >> i just did exactly what i'm about to describe. i dropped hbo and went for netflix as the streaming content because there is so much more content on that. now does it justify, judge, the $170 a share? that is the big issue. i don't think anybody here on the desk including pete thinks it does so i got to go with weis on the bear case. >> yeah baby. >> i think you can buy this on the dips. i think you get a chance to get back in between 140 and 150. >> older brother, wiser brother. >> a lonely thanksgiving. >> we'll find out soon enough. >> meantime, wall street's heavy
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hitters meeting in palm beach at the annual tiger 21 conference. gary kaminsky is bringing us one of those big investors now. a great time to do so, gary. >> thanks, scotty. great to see you. eric spratt is joining us. eric, i have to get right to it. why is gold not printing 2300, printing 1675 with everything that happened over the last six months in terms of all the money being printed around the world what is going on with gold? >> right. i'll sound very conspiratorial with my answer but i've done an analysis of gold which i published about four months ago saying that i can see 2400 tons per year of net new buying of physical gold not paper gold in a 4,000 ton market. so i asked myself, and it's been the same for the last 12 years. no increase in supply. in fact even gold production was down last year in 2012. and i have to conclude that the
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gold is coming from western central banks and you might wonder how they can do that. how they can do it is they have a line on their balance sheet which is one line called gold and gold receiveables. one is physical. one is gold that's out. we don't know what gold they have. you and your listeners would know there is this great discussion about where is my gold, right? >> right. >> the germans have asked where their gold is. the mexicans -- >> are they asking because they sold this gold a year ago when the gold was trading at record highs? do they sell the gold in the future market and therefore now actually are delivering the gold? >> what they do is it's been leased out in order to save this 2500 demand of physical gold somebody has to supply it. so the guess is that the central banks must have supplied that gold. >> right. >> this has happened now for a number of years. >> okay. so we at the point now expect given everything happening around the world gold is ready to take off? >> i think you have to find that point where people finally
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demand their gold from central banks and they don't receive it or for some reason there is a physical shortage. i could probably talk to you more about the silver market shortage manifesting itself. >> we'll get to silver in a second. scotty? >> thanks. eric, nice to see you again. just want to ask a quick question. credit suisse was out with a note today their headline being the beginning of the end of an era when speaking of gold and what they say are two of the following things. gold significantly over valued relative to the long run historical experience. peak of fear trade has passed. you have head winds according to credit suisse. >> yes, i guess according to them i have. however, i also have various things going in my favor. which i -- when i got involved in gold in 2000 i never thought i would see this but we had money printing, we have bank runs, we had a situation just this week s & s over in the netherland. they had to get bailed out because people were taking their deposits out of the bank. i never thought i'd be the beneficiary of these tail winds
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that are now happening in the gold market and when i see it, the germans asking for gold back, the austrians wondering where their gold is, mexicans announcing they only got 5% of their gold in the country and my own work says somebody's been supplying gold in this market, there's going to be a shortage. >> quickly before we run, we talked about gold but you actually like silver better than gold if you had to buy one commodity right now. >> right. there is a reason for that. for example, if you were to go to the u.s. mint website you would find out that people are buying as many dollars of silver as gold. that means they're buying 50 times more physical silver than gold. >> right. >> it's only produced 11 to 1. there's 11 ounces more. for investment purposes, a lot of silver is used for industrial uses, there is only three times as much silver to buy versus gold for investment. >> thanks very much for joining us. scotty, from what is now becoming a very hot palm beach as you see here, back to you. >> beautiful live shot there. thanks so much for bringing that great interview to us. eric sprott thanks to you as well for coming on our show
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today. coming up on halftime the clash of the titans. one week later. we'll look back at the tale of the herbalife tape. the company is stuck in the middle of this very heated battle. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked.
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welcome back. the brawl heard around wall street one week later. we're back at the place where it all happened where traders stopped, volume dropped, and investors gasped as two titans went toe to toe. >> i was concerned about dealing with carl icahn because unfortunately he does not have a good reputation for being a handshake guy. >> i appreciate, bill, that you called me a great investor. thank you for that. unfortunately, i can't say the same for you. >> number one carl is free to make a tender offer for the company. carl you want to bid for the company go ahead. >> you don't have to tell me what i'm free to do. >> okay. number one. number two obviously we don't think there is going to be a tender offer for the company. we don't think the company is buyable. we don't think any person is going to write a check to buy a business we believe is
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fraudulent. >> guys, it's obviously a day that guys on the floor, the guys who were here, won't forget any time soon. but it really boils down from this point forward as to what herbalife does, what the herbalife story ends up being. and at least since that appearance last friday one week ago today, if you look at the tale of the tape so to speak since all of that happened, there is a look. i mean herbalife, the stock is down 19% since bill ackman disclosed his short. it's down about 16% or 18% or whatever. the stock is down since last friday is the point that we're trying to make here. >> so i think what you have to look at here, herbalife, their fate is out of their hands. right now it's in the government's hands who is allegedly investigating the pyramid scheme. in terms of the trade we know -- he just played the short factor that bill ackman had an unreasonably large short position in the company because he hedged it with a short in another company. we don't know if icahn did the
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same thing or not. i'd stay on the sidelines t is too difficult for the average investor to decipher this trade. >> there are those deciding whether they should be at this point the low side of it or the ackman side of it. and let's listen to what kyle bass had to say earlier today with gary kaminsky back down in palm beach. >> i have not studied herbalife. i don't know whether herbalife is a ghost town or not. but knowing all of the different players i've known some better than others for a long time. dan lobe is one of the most talented investors in the world. he's a good friend. and i would never bet against him. i think ackman's got a tough road to hoe from here. >> that's sort of one of the side shows to all of this is you do have some public some not so much taking sides. >> well, again, just from an investment standpoint the stock is down 16%. to me this would be the moment if you are going to make the play against ackman, if you're
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going to make a lobe or icahn type of stake this is where to me you would want to do it. if the stock continues to move lower here i think maybe that is an indication folks aren't going to go in and take the other side of this trade. >> coming up on halftime let's look at where the dow currently stands as the market rallies. we are raising a red flag though. on two sectors that may be over heating. there's the dow. 13994. just below that 14,000 level. we're back in two. ♪ [ construction sounds ] ♪ [ watch ticking ] [ engine revs ] come in. ♪ got the coffee. that was fast. we're outta here. ♪ [ engine revs ] ♪
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and investment companies." it is going to be a filling and satisfying busy hour of power lunch. top of the hour. all about dow 14,000. we'll tell you how exxon and chevron helped participate in this rally and where the markets may go from here. and the one and only john harwood will be sitting down with alan simpson and erskine bowles to get their take on the debt deal in washington. all that and more on a very busy hour of power. scott, back to you. >> thanks so much. look forward to that. see you at the top of the hour. with stocks at five-year highs our next guest is looking at two sectors in particular that seem over bought and prime for pullbacks. yahoo finance's senior columnist mike santoli joining us here at the new york stock exchange. it's ban good rally right? you could point to a lot of sectors as perhaps being over bought. what two have you honed in on? >> this by the way is for
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somebody who is interested in playing a pull back. i've been kind of overthinking it and looking for one before we got to this point but i think home builders in particular. the reason i'm comfortable with this is obviously the epicenter of the prior bubble. the home builders etf, look at xhb, 45 at the peak in 50e 6, down to 8. now about 29. so you got to trading about 2/3 of where it was at the height of the biggest housing bubble we're ever going to see and to me what makes you more comfortable i think in this situation to bet against it is they're not particularly great businesses through a cycle. they're trading at two and three times book value, went beyond book value. you don't get a lot of competitive advantage or brand value or repeatable earnings power so i do think that if you're looking for a pullback that is one area. >> it is amazing that the ability of the space to maintain the momentum, right. >> sure. >> what was it d.r. horton earlier in the week and some other names that continue to report good numbers so that the people who have said, god, these stocks have run too far too fast defies logic. >> and by the way they will
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continue to print good numbers. that is the thing. i don't think the news float will help you on the short side. to me it looks like i think of june per back after the tech bubble. it went to five bucks or whatever and it rallied hard but it never really kind of participated in the second stage of the bull market. >> the other interesting sector that people talk about is sort of a validation of the move. >> yeah. >> the transports right? the theorists are -- the first to point that out. >> i do buy that. however, the transports were up 20% in ten weeks coming up to this week and it's up a little bit today. you've seen a little bit below the surface people who are really trying to look this rally like a gift horse in the mouth saying transports were a little bit fatigued earlier this week. the mid cams. some other areas. today is kind of blowing out of the water but i do think the transports just in terms of under performing for a little while would make a loft sense. >> you have a unique view of the market as sort of a keen eye to look for other things that other people don't often see. what is a good way to play this thing here then? >> the transports, the iyt,
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obviously, etf that tracks just the transports and i do think that is one way. i wouldn't really kind of go nuts trying to say this thing is going down hard. i really see it's a matter of we've taken, front loaded a lot of good news this year. market wide. and if it's going to actually back fill a little bit it is probably going to be these areas that might actually be that process. >> have a great weekend. >> thank you. >> mike santoli, see you again soon. coming up the sector left behind. we're talking financials after the break financials after the break. plus, as the market rips, so does the euro. we have the play on the hottest currency right now. "halftime" is back in two. [ male announcer] surprise -- you're having triplets.
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it's a big day, as you know, for the dow. financials are riding that momentum higher. but for the most part, the sector has been left behind. kayla joins us with more on that. obviously we know what happened in the crisis and last year was a pretty good year. we wouldn't be at 14,000 without financials. that's clear. but give us more insight. >> scott, even with the relative gains of last year on a percentage basis, you are still way down from the crisis. remember the big bang says we know, driven near ex stintincti. despite one for ten stock split in 2011 and moves to slash cost. clean the balance sheet, even
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replace the ceo. the stock is off more than 91% from its 2007 highs. then bank of america. a state of mortgage settlements lifting some of the overhang as has its new bac restructuring. the stock, even though rallying 60% over last year, still almost 80 mes lower than its '07 peak. same goes for morgan stanley and gold man stacks. also down thanks to a merger and underwriting activity. even wells fargo, arguably one of the most conservative banks, teetering and down about 5%. relatively good performance compared to other banks since that peak. but only j.p. morgan squeaked by without any post peak gains. with the '07 highs come together rescue of bear stearns and washington mutual, amid the
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london blair blunder. shares are 11% higher in the next 12 months and that's even nearly 1% higher from the crisis but analysts and stock pickers have taken on an increasingly bullish stance into the sector going into the current rally. analyst predicting yesterday a 14-year run higher for banking stocks. 14-year run. >> yeah. a big call, kayla. and to your point, thank you so much, have a great weekend. bullishness, i'm somewhat surprised at. universal among you guys. if i was to say to you, regulation up, earnings power down, yet every one of you guy says bullish banks. >> no, return to normalized earnings. it is accelerating much quicker than the street anticipates. >> and they rebuilt their balance sheets to dramatically, scott, then you have a return of trading. i don't care. for all of the folks tell meg that retail isn't out there trading, can i tell you trade monster record numbers everyday. morgan stanley, take a look at what's going on there.
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goldman sachs as well. >> all right, euro finishing a strong month of january with gains versus the dollar. but is the run taking the currency to 14-month highs nearing an end? let's bring in boris. amazing level we have seen the euro somehow get to. where does it go from here? give me a trade in the levels. >> well, euro has been up for two reasons. number one, the break up of the zero on-line trade is happening. i think debt traders are getting tired at this point. and second, ecb refuses to play currency wars. at this point, euro is high because of valuation. that's yi think it will get very tired at this level. i want it be short the euro at 13750 and target of 3700 on the first leg and possibly down 13500. the moment super mario steps up to the mic and says, we think the euro is too high web will see prove profit taking.
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